Mounting a mutiny with Smile
THE ousted CEO of listed Gold Coast dental group Smiles Inclusive is leading a mutiny to wrest back control of the flailing company he founded.
Mike Timoney has combined his shareholdings with David Herlihy, who resigned as chairman of the Burleigh Heads company on Monday, and will call an extraordinary general meeting to extract two sitting directors and appoint a new one.
Between them the men, both non-executive directors, hold 18 per cent of shares in the company, making them the company’s largest shareholders.
They announced their merged interests to the ASX late on Tuesday and say the current management lacks the proper health sector experience to help the company thrive.
Smiles Inclusive went into a trading halt on March 1 after more than half its value was wiped from the stock exchange in a single morning after it revealed a half-year net loss of $1.59 million on practice revenue of $16.1 million.
The share price for the company, which listed at $1 a share in April last year and was previously valued at close to $60 million, was trading at 17c at 10am yesterday with market capitalisation of $9.8 million.
Mr Timoney stepped down as chief executive in the wake of the poor performance, with Smiles announcing Tony McCormack had taken on the role.
In a statement through a Sydney public relations firm this morning, Mr Timoney said the board was in need of renewal.
“There is a need to refresh, update and round out the board of directors and management of the company with talented and experienced experts relevant to the Smiles Inclusive business model,” he said.
“Going forward I would plan to act as a non-executive director to support the company’s goals and aspirations.”
In the same statement, Mr Herlihy said he was “extremely disappointed with the corporate governance and performance of the current board”.
“I will be calling for both the new chairman, Mr David Usasz, and executive director, Tracy Penn, to be replaced at the meeting,” he said.
“The circumstances surrounding their appointments will be a matter for all shareholders to consider.”
The statement said paediatric dentist and SIL shareholder John Camacho would stand for election to the board, supported by Mr Timoney and Mr Herlihy.
Dr Camacho said he’d “joined the Smiles Inclusive endeavour under the leadership and vision of Mike Timoney”.
“We have concerns that his displacement will significantly impact on the direction of the company under the stewardship of the new board,” he said.
“It’s concerning that the level of health sector experience remaining on the board will compromise the quality and insight of decisions it makes.
“This could adversely affect the growth and forward movement of the company.”
Dr Camacho said partners and shareholders were “somewhat in the dark” about recent changes to the board and management.
Mr Timoney has retained the services of legal firm Arnold Bloch Leibler.
The Bulletin has contacted Smiles Inclusive for a response.
THERE IS A NEED TO REFRESH, UPDATE AND ROUND OUT THE BOARD OF DIRECTORS AND MANAGEMENT OF THE COMPANY WITH TALENTED AND EXPERIENCED EXPERTS RELEVANT TO THE SMILES INCLUSIVE BUSINESS MODEL MIKE TIMONEY